Visual Tour for 12069 Leighton Court Open Sunday 3-5

Trying to sell a home in this market is incredibly confusing for most home owners. There are a number of reasons why pricing is SO important in your quest to get to the closing table.....here's why

Here's What Happened and Here's What it Means:

Christmas came a bit early, sort of, for the American consumer this week. The Federal Reserve lowered interest rates on 12/16 to the lowest rate they could at essentially 0%. Let's hope this works because the only place to go now is triple dog 0% and I don't think anyone wants to see Paulson and Bernake with their tongues stuck to the flag pole out in front of the school.

What the Fed is trying to do is spur spending either through use of credit lines or some form of home equity line to help the overall economy. If you are a homeowner, credit card user or equity line user tied to real estate you are affected by this in some significant way depending upon how your particular credit is dictated by the prime rate. In many cases home equity loan rates will go down and lower monthly payments for consumers. This lowering will eventually ease pressure on many different forms of credit either directly or indirectly.

The single biggest fallacy of the post credit crash world is that there is no money to borrow. This is simply not true.

Here's what you must have in order to borrow money for a home purchase:

1) A decent credit score which in the post credit crash world means mid 700's.

2) A job. (not always the easiest thing to maintain in Today's New World of Real Estate)

3) A down payment. This means anywhere from 3% to 20% down depending upon load size and credit score. Yes there are still minimal down payment loans available but you need tremendous qualifications to get it.

4) A savings account with actual money in it. Imagine that....saving money and not spending it.

When I spoke on WIBC on 12/17 with Big Joe Staysniak and Terri Stacy it's clear that consumers are struggling to differentiate between the lowering of Fed rates, the buy back of troubled loans by the Fed and the ending of the Fannie Mae/Freddie Mac foreclosure moratorium. These things are NOT all tied directly together other than they all affect the big pot of monetary stew our country is in at the moment.

As I said at the outset, let's hope this works. The Fed has now taken us to 0. Unlike the car commercials or the 1980's song by the group The Fixx, the phrase 'saved by zero' has a much bigger impact, a critical impact on all of our financial futures.

UPDATE: Here is the 28 minutes (comercials edited out) of Greg's WIBC appearence on 10/13. Click here to listen.

If you're looking for the WIBC economic round table discussion from 10/6 please go HERE.

"My problem lies in reconciling my gross spending habits with my net income."
-George Bernard Shaw

What in the world is LIBOR?
The current overall economic challenges we're facing are broad. To boil it down to how the housing market is affected, one term we've all been hearing about in the last several weeks is LIBOR.

The LIBOR benchmark is a key rate that reflects how lending institutions loan money. It affects how businesses borrow money. It affects how people borrow money to buy homes, cars and just about anything else that requires capital. Right now the LIBOR numbers are very high meaning borrowing money is tough. It's high in part because so much money has disappeared from the stock market through many factors (corporate defaults, mortgage foreclosures, etc). In essence, lenders are scared. Hey, we're all a bit uncomfortable right now. But there is some light at the end of the tunnel.

One of the reasons that the LIBOR numbers remained so high is that the money agreed to in the economic bailout has not yet been put to use. It's not been used yet to help the current crisis because we passed a bailout bill in 10 days without really having any plan.

Uhhhhh.....Isn't this what we all feared?

The good news from those smarter than I on these things is that many people do have great faith in Henry Paulson and Ben Bernacke to get the right people and plan in place to use the bailout to help ease credit.

To keep this simple, if you look at LIBOR numbers for the next 30 days, they are still very high meaning borrowing money will still be tough. The 90 day numbers are much lower meaning the markets believe over the next three months money will be easier to borrow. IF...and it's a big if that does occur, car, home and business loans will be easier to get and we may see some progress in getting this mess headed in a better direction. LIBOR getting better is essential. Life getting back to normal (whatever that means) is essential. For all of our sake, let's hope we see some steps in the right direction between now and Christmas.

Questions, Comments , Donations? Greg@GregCooper.com or 317.848.GREG (4734)

Want to make the best home purchase in the last 20 years? Get ready.

In part 3 of Here's Your Sign, we're going to step way out on the ledge to talk about the future. In ordinary times, for whatever those even are anymore, we could look at all kinds of empirical data and have a fairly good feel for value and trends. Not in the last 18 months.....not even close. Any realtor or pedestrian who thought they did was either foolish or lying because it's been that tough. We are, however, the most affordable city in America by many accounts including a new list out now in BUSINESSWEEK.

It's my belief that in 2009, we may begin to see that change. What I will not predict is that values will rise, the markets will normalize, the seas will part and all will be right with the world. The one thing that seems to be aligning is a change (every one's favorite word these days) in the direction of the overall market in the next 12 months.

As we discussed in parts one and two of our market analysis, the actual market trends consistently follow roughly 9-12 months behind the top home builders stock prices. During mid July (by most stock charts on or about 7/14/2008), those national builder stocks all switched direction and began trending up. If history repeats as we believe it will, then the summer of 2009 will be the turning point for our home market.

I want to reemphasize several points here. This does NOT mean there's going to be a dramatic turnaround in value. All it means is that we may see the overall trend change from what it's been over the last 30 months. Translating this for home BUYERS, once the trend changes, the psychology of home sellers will change and be much less agreeable to significant negotiation as they should be today. Prospective buyers have been saying for months that 'we want to buy at the bottom.' Well guess what.....we're there. Once the first three people figure out the market is truly going to turn, it's too late, buyers. If you want to take advantage of the most significant downturn in the last several decades, make your purchase before any sign of warm weather hits next year. You want the bottom? It's about to hit us in the head. Be ready and have your checkbook out. Once the reality of change occurs, there will be a stampede from all of this pent up demand. When that happens, you'll want to be the one standing on the sidelines with your shiny new below market home purchase rather than those attempting to get in the game with sellers not so ready to play 'let's make a deal.'

Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)